Can't Stop Me Now - Power Burn Leads Lower 48 Gas Demand Gains on Limited Fuel Switching

RBN Energy Blogcast

Despite the highest natural gas futures prices in over a decade, its use for power generation in the Lower 48 has set records in recent months. This is in part by design: economics and environmental regulation have broadly favored gas-fired plants and pushed into retirement hundreds of coal-fired plants in the last decade or so, reducing price-driven fuel-switching capabilities between the two fuels. However, there’s more to it than that: a tight coal market, marked by low stockpiles, high export demand and record high prices, is limiting gas-to-coal switching even further, making gas burn for power much more inelastic to price. In today’s RBN blog, we take a closer look at this key intersection of the gas and coal markets.